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LEVERAGE: The use of credit or loans to enhance speculation in the financial markets. Suppose, for example, that you take the $1,000 in your bank account to your stock broker and purchase $1,000 worth of stocks, bonds, or whatever. A leveraged purchase would let you use your $1,000 to buy, let's say, $10,000 worth of stocks or bonds. The remaining $9,000 of the purchase price comes from a loan.
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AUTOMATIC STABILIZER: A feature of the federal government's budget that tends to reduce the ups and downs of the business cycle without the need for any special legislative action, that is stabilization policies. The two key automatic stabilizers are income taxes and transfer payments. When our economy drops into a recession, unemployment rises, aggregate output declines, and people have less income. But with less income, they pay fewer income taxes, and thus there's less of a drain on consumption than their might have been. Likewise, many who are unemployed get transfer payments in the form of unemployment compensation, welfare, or Social Security. This lets them consume more than they would have otherwise. During an expansion, both of these go in the other direction. As a result, a recession sees more spending and fewer taxes, while an expansion has less spending and more taxes, all occurring quite automatically. See also | business cycle | stabilization policies | fiscal policy | transfer payment | unemployment compensation | welfare | income tax | business cycle | contraction | expansion | consumption | income | aggregate output |
Recommended Citation:AUTOMATIC STABILIZER, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2025. [Accessed: April 28, 2025].
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AVERAGE PRODUCT AND MARGINAL PRODUCT A mathematical connection between average product and marginal product stating that the change in the average product depends on a comparison between the average product and marginal product. If marginal product is less than average product, then average product declines. If marginal product is greater than average product, then average product rises. If marginal product is equal to average product, then average product does not change.
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PURPLE SMARPHIN
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads wanting to buy either a 50-foot blue garden hose or a turbo-powered vacuum cleaner. Be on the lookout for broken fingernail clippers.
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General Electric is the only stock from the original 1896 Dow Jones Industrial Average remaining in the current index.
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"Nothing is a waste of time if you use the experience wisely. " -- Auguste Rodin, Sculptor
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NBS
Nash Bargaining Solution
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